9/27: Market Update

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Episode Transcript

Speaker 1 (00:00):
Hello, and welcome to Money Talks with Terry Sandbold and
Blake Samdbold and gentlemen, we are going to do a
bit of a market update today, Blake.

Speaker 2 (00:09):
We thought it'd be time for one.

Speaker 3 (00:10):
So, I mean, it's crazy, a couple of days away,
we've got fourth quarter knocking on the door. It's it's
been been a blur this year, at least points a point.
I mean, I can't describe how many reviews that we've
had last week or so, and everyone's been like, I
can't believe it's we're already almost October. I mean people
started saying, you know, we hope you have great holidays.

Speaker 1 (00:31):
It's like, you know, all the Christmas stuff is out
at Costco's.

Speaker 2 (00:34):
Out, it's right over.

Speaker 4 (00:35):
We got a call from our company that puts up
lights for us on our house and trees, and they
wanted to come out this week, so.

Speaker 2 (00:42):
They get ahead of the get ahead of the schedule.

Speaker 4 (00:44):
And you told them, what, well, all the lights are
in the boxes out sitting outside of the garage right now,
ready for them.

Speaker 2 (00:52):
Or ready to come next week.

Speaker 4 (00:53):
So my gosh, yeah, and they said that they got
to get it all done.

Speaker 1 (00:56):
Well, I kind of think you're contributing to the problem, sir.
I'm just going to tell you that right now. But
I digress.

Speaker 2 (01:01):
Okay, it's not Halloween.

Speaker 4 (01:02):
Well it's kind of like, yeah, I won't turn them
on until after that. Yeah, I don't have any orange
lights in my Christmas decorations, so I'll leave it separate
and distinct that way. But yeah, you think about it.
A few weeks ago, we were talking about, oh, it's
fourth of July. Now they do the countdown to the
State Fair, and no, the State Fair is over now.
We were going through, and we went through James J.

(01:23):
Hill the week after that, and now bang, here we go.
Halloween candy think has been out in the stores for
a few weeks already.

Speaker 2 (01:30):
Yeah, they're already taking it down.

Speaker 1 (01:31):
It seems like if only winter felt this quick.

Speaker 4 (01:34):
So we're gonna have to watch closely. And Christmas, will
they put Valentine stuff out the day after or how's
that going to work?

Speaker 2 (01:42):
I don't know. It might be summer closer already at
right after Christmas. I don't know.

Speaker 1 (01:48):
We live in a crazy consumer product driven world like.

Speaker 3 (01:53):
We do, and you know, it does feel like it's
gotten more unique the last couple of years, and I
think it's just how they're trying to pivot with fly
chains and to have different lead times on things. I
don't know, but that's that's kind of my my haunch
on that.

Speaker 2 (02:08):
He would bring it back to economics with me.

Speaker 4 (02:10):
Me, oh sure, well, I mean aren't you supposed to?
I know, I mean, what else is there? Blake?

Speaker 2 (02:16):
That's right?

Speaker 1 (02:18):
Well, so all that said, the fact that our lives
are slipping away, you know, at light speed, like I mean,
like what is going on? Because I mean there seems
to be a real I just I know this in
my anecdotal polling of people. There's a real weird chasm
in sentiment right now.

Speaker 3 (02:32):
It is, and I mean it's an incredibly widespread there
still and I mean consumer sentiment broad based numbers still
aren't that great.

Speaker 2 (02:41):
But you know, it's interesting. It is so politicized right now.
And you know, we've.

Speaker 3 (02:46):
Looked at different polls of consumer sentiments and we've done
this for years, and I mean it was pretty much
right after Trump was elected, Republican sentiment jumped and launched higher.
Democrat sentiment naturally move moved lower on that, and I
mean you've seen that happen. You know, in general the
last several presidential cycles where it does kind of reverse

(03:09):
on that, but this is definitely one of the more
magnified ones, which is you know interesting. I mean it
kind of speaks to the times right now. But you know,
if you actually look at correlation between economic growth and
some of the sentiment readers on there, it's a lot
less than people would think on that. And yeah, which

(03:31):
you know if you think about it to an extent,
I mean some of the more discretionary type stuff that
that's gonna change, be more volatile, but are you gonna
go get your groceries? Are you going to fill up
on gas? Yeah, I mean a lot of that stuff
doesn't necessarily change.

Speaker 2 (03:46):
You know. You know, you're you're more ingrained in your routine.

Speaker 3 (03:50):
You know, if spring break is at a certain time,
you want to travel then, and you know, there are
certain things that are more fundamental and foundational to your
beliefs than I think.

Speaker 2 (04:01):
Meets the eye.

Speaker 3 (04:02):
And that's it's kind of an interesting thing on that.
So correlation is actually a lot lower than you would think,
but it is it is still a factor to watch,
and you know, we look at it. I mean, one
from discretionary type stuff and spending. But two, you know,
if sentiment is a little bit lower, it does keep
some exuberance at bay.

Speaker 2 (04:23):
And you know, I.

Speaker 3 (04:25):
Had a conversation with some of this last week about
green span and talking about a rational exuberance, you know,
a long time ago and greenspan right, and you know
there's rhetorics saying are we at that same spot?

Speaker 2 (04:37):
And you know, I don't think so.

Speaker 3 (04:40):
I mean, you're just you're not seeing that in a
lot of the sentiment type indicators out there right now.
So I still think there's opportunities, but it's you're You're
completely right. It's an interesting thing to watch.

Speaker 1 (04:52):
It sure is what are the top lines for you, Terry,
like in just you looking across the whole you know,
landscape at the moment?

Speaker 4 (05:00):
Well, I think I think one thing that people are
concerned about is having control of their future. I mean,
that's kind of the big picture look at things. But
I think people are getting more attuned to working with
financial advisors financial planners than they ever used to be
because it is an automatic for your success. You really
should work at it to attain bigger and better success.

(05:23):
So looking at what to do with as the world changes.
I think people are getting more in tuned or trying
to find more and get more information understand it a
little bit more than they ever used to. Because I'll
using an old adage. My parents they didn't like to
talk about this stuff. That's Blake's grandparents, you know, when
you think about it, and I would want to sit

(05:43):
down with them, And first thing my dad would do
is we're going to My mom wanted to talk about
it a little bit. She wanted to make sure she
was okay. My dad just he thought, well, it will
be okay. So he didn't really he knew that my
mom would look at it and I would look at
it as a backup to my mom, you know that
time with a so then he could, you know, we'd
sit down, it's like, let's talk about everything, let's get

(06:04):
it all in order. We were doing a state planning
at the time. That comes to mind, and he's like
he gets up from the table and he's like, you
two deal with it. But this isn't my thing, and
you know that's not the best way to handle your
financial future. So I did not get into the business
because my dad was in the financial services business. Blake
would say, oh, for goodness sakes, Yeah, we none of
us would have been if that's how it had to

(06:25):
be that type of thing. But there's a lot of
people that are finding out the hard way maybe that
if they do no more, they do work with somebody,
they can do better and they can better their financial
futures for them and for the next generation. So kind
of looking at that from a big picture, there's many
different things and the proactive money management is and other
that goes along with that too. We emphasize that at

(06:48):
SANDWLD Financial Group because a lot of people in the
past maybe did a reactive rebalance of their funds and
it was too late. You know, they'd see something go down,
then they would move at the absolute worst possible time.
And that's not when you want to walk away from something.
That's when you want to look at should you actually
buy more because it's on sale, you know, So simple strategies,

(07:08):
simple things like that. We can get very complex on
how we're going to talk about things, and we'll go
a little bit more into the technical side. That's one
of Blake's specialties on the market itself. But getting the
right balance, how does it translate to the public.

Speaker 2 (07:22):
To is key? Oh, absolutely, you know. So it's like.

Speaker 4 (07:27):
We do reviews every single week all of our advisors.
Some come in and meet in person because they still
like to do that. Some will do zooms and phone
calls and different things because we have clients all over
the country. But the thing is, no matter where you're at,
we can actually help. So I think having the right
information first, we'll talk about some of that today, which
can lead to better decisions going forward. And you don't

(07:50):
have to take this on all by yourself. I think
it's one of the bottom lines that we want to
reinforce for people. And that doesn't mean you don't You
don't have to feel like you're admitting you don't know.
Blake and I would Blake and I would not be
the best mechanics in the world, let's put it that way.
I think our our our shop would probably shut down
in about six months because we wouldn't know what to do. Yeah,

(08:14):
you know.

Speaker 2 (08:15):
So now I think we love cars. We love cars.

Speaker 4 (08:17):
We buy a lot of cars personally worlds of cars,
so we keep that industry going from wh we wanted that.

Speaker 2 (08:25):
Highly.

Speaker 4 (08:28):
So I mean that's how we look at life. People
do different things. We depend on each other and I
think looking at some of the review today, we're going
to go through an update what has taken place so
far this year, and someone's setting the stage forward the
end of the year going into twenty twenty six, So
many things to know about. We do have an upcoming
sevenar that we should mention real quickly. It is on

(08:51):
October seventh, so just around the corner. It'll be at
six pm. It'll be at our offices at the Sandworld
Financial Group offices in Minnetaka. It is entitled The Retirement Playbook,
a Guide to Confident Planning, and both myself and Blake
will be presenting at that So we're going to go
through some of the key things you need to be

(09:12):
aware of in regards to planning for retirement. We'll go
through a lot of topics in say ninety minutes or so,
but I think the main thing that you'll get out
of that is there are a lot of things to
think about. There are a lot of things to make
big time decisions on, and if you're not prepared, are
you educated on your decision? And if you make decisions,
some of those are one time decisions you cannot change.

(09:34):
So having the information upfront understanding up front. We do
a lot of work in retirement planning. We have since
nineteen eighty six, so we have thousands of people we've
helped all over the country plan their retirement, manage their assets,
help them with retirement income cash flow analysis, help them
develop a plan, implement the plan, and follow up on

(09:57):
the plan for years and years and years. So we
have some clients they're still with us since nineteen eighty six,
and some are the next generation of the clients that
became clients in nineteen.

Speaker 2 (10:07):
Eighty six, so amazing.

Speaker 4 (10:08):
So that's what's really fun about that. But we'd let
I think it would be very important to attend that
we do have limited seating and to get your name
set up on that, just give us a call at
nine five two five four four two eight three seven.
We'll provide advertisers and refreshments, so if you're running right

(10:29):
from work, don't worry. We will feed you and a
lot of great information to feed you as well.

Speaker 1 (10:35):
Absolutely, and to register, just call nine five two five
four four to eight three seven or register online at
Sandbold fg dot com. You're listening to Money Talks with
Terry Sandbold and Blake Sandbold and today, we're doing a
market update, Blake, and this is this is your wheelhouse
right here, but you also have a companion mailer for

(10:58):
it too.

Speaker 3 (10:58):
We do, so we've got a great mailer that week
going through a number of topics where we're going through today.
So it's our most recent market update. You know, we
we we give in depth thoughts on what's happened in
the economy. You know, two or three key themes that
we're watching right now, as well as a couple of
areas that we're looking at, a couple of different sectors
or parts in the market that we that we see
as having opportunities going forward. And you know, I think

(11:20):
that's the the key differentiator in it. It's not just
talking about solely what's happened in the past. It's actually
where we see things going forward as opportunities in the
near term. So if you'd like your copy, give us
a call at nine five two five four four two
A three seven or go online to sandviled FG dot com.

Speaker 2 (11:39):
Perfect. So, you know, Kelly, as we're.

Speaker 3 (11:43):
Talking about things a little bit this year, you know,
I do want to set the stage a little bit
for kind of what has happened, and.

Speaker 2 (11:49):
You know, it's it's interesting.

Speaker 3 (11:50):
It's it's been a good market this year point to point,
and you know, actually a pretty a broader rally.

Speaker 2 (11:58):
In the scheme of things.

Speaker 3 (12:00):
You know, we've kind of come through third quarter earning
seasons and you know what, what what really played out
quite a bit there is the companies that had been
more focused on CAPEX expenditures or AI buildouts have done
the best and have been the reward of.

Speaker 2 (12:15):
The most through that.

Speaker 3 (12:17):
And you know, it's it's gonna be I mean, the
earning cycle or season was far better than most had expected,
more in line with what we had been looking for.
I mean, that's that's what we've been articulating this this
entire years. We felt companies and businesses were still doing
better than people were giving it credit for.

Speaker 2 (12:34):
And you know that the key thing that'll be.

Speaker 3 (12:36):
Worth watching on that some of this over of the
next couple of quarters is due to the one big
beautiful bill. People can expense and appreciate capex expenditures a
lot quicker right now, so I think some of that
will happen quicker. So it's gonna be really important to
look at what is actually going on on their balancing

(12:56):
income statement for some of the current moves. So I
I think getting ready for some of that is going
to be a big theme going into next year. But
you know, in general, you do look kind of some
of the tech and AI momentum trades have definitely worked
well this year. Banks have actually worked quite well this year.
I mean financial companies, especially on the large ones. You know,

(13:17):
people aren't defaulting the way some had thought they would.
They've been able to take advantage of some of the volatility.
International stocks are actually if you look at the msci X.

Speaker 2 (13:29):
World, it's up double digits over the US this year.

Speaker 3 (13:34):
Emerging markets again up double digits over the US so
far this year, so over a ten percent premium over
US markets.

Speaker 2 (13:44):
That's pretty much the strongest that has been in over
a decade.

Speaker 3 (13:47):
And you know, that's kind of baffled a lot of
people to say, Okay, we imposed these tariffs. It's supposed
to be US centric. Why are foreign countries doing.

Speaker 2 (13:56):
Better than US this year?

Speaker 1 (13:58):
Question?

Speaker 2 (13:59):
Right?

Speaker 3 (14:00):
And you know, I think there's a number of different
factors that are going out and play there. So the
dollar has weekend from some of that, as there's been
less capital flow to purchase dollars there's been more flow
into gold. You know, China's talked about saying we need
different reserve type currency alliances. So some of the geopolitical
instability around some of that has weekend the dollar a

(14:23):
little bit. With the dollar weekends, foreign companies and countries
can do better. So it's actually inadvertently, you know, help
helped their markets through some of this, which is kind
of fascinating to think about. So and they've a lot
of those countries have had really low valuations, and you know,
a different way to think about some of it too

(14:43):
is it's forced some of their countries to spend more.
I mean a lot of those countries, you know, if
you look at Europe doesn't have a lot of really
high powered technology companies. You know, they have some that
are private and Germany in the past have been quite
good at that, but a lot of them are more
traditional type companies with somewhat of an emphasis on industrial

(15:05):
type names. And you think about if we're saying we're
going to support their defense sector less industrials, defense companies
are one of the largest subset of industrials. So there's
been pockets like that that have actually been brought back
to life. So to speak, and kind of reignited some
of their economies. So interesting spot. I still think there's

(15:26):
some opportunities there, but we do see a lot in
the US.

Speaker 1 (15:30):
Can I just ask a quick question, because you alluded
to tariffs in this last bit of information, Blake, So
you know, earlier in the year there was so much
brew haha about tariffs and fear and everybody started using
the term all the time, even though most of us
didn't really know what it meant or how it would affect.
Can you just give us a quick overview on what
you think the tariffs have done with regard to our

(15:50):
own economy this year.

Speaker 2 (15:52):
How do you think it played out?

Speaker 3 (15:53):
Yeah, So if you look at kind of the cost
of tariffs, it looks like it's kind of a third
a third, a third on who's absorbing some of the
cost on that, So you're you're having roughly a third
by the manufacturer, third by kind of the end company
distributor type side, and a third by the consumer. So
it's kind of been spread out on some of that.
So you have seen some inflation, but you know it's

(16:16):
kind of you know, I think you.

Speaker 2 (16:19):
Think about it a little bit like a tax.

Speaker 3 (16:22):
So if you said, as an example, you know, a third,
so it's a five percent tax is kind of a
way to think about some foreign stuff. You know that
that that does take kind of wallet share, so it
is kind of a you know, there's less movement to
go around. I think as some of that happens. But
on the flip side, if you say some of the
capex expenditure that comes back to the US should kind

(16:45):
of re stimulate and ignite some things here, there's some
of an offset with that. You know, it's been a
lot of revenue that the US has collected to totally
subsidize some of that capex expenditures. So it has I
would say it's been more muted to this point then
a lot of people thought. You know, it's been a
lower inflation impact than probably a lot of people have thought.

(17:06):
And you know, I think they're still negotiated to be done,
and you know, I think both parties are still going
to keep coming to the table more and more.

Speaker 2 (17:15):
We'll see what happens.

Speaker 3 (17:16):
You know, as as it's obviously right now being looked
at for saying are they legal or not the way
they were put in place, I think there's gonna be
a lot of back and forth over the next couple
of weeks, a couple.

Speaker 2 (17:27):
Of months on some of that interesting.

Speaker 4 (17:30):
Cool It would be somewhat difficult to untangle those zough
now at this point, wouldn't it I think?

Speaker 2 (17:35):
I think, yeah, I think would be incredibly complex. You know,
I don't It's.

Speaker 4 (17:39):
Kind of like the cement is almost dry but not
quite on the terrace.

Speaker 3 (17:42):
Right, I mean, you know, the way that they would
pay back the amount of revenue they've received on that,
I think would be extraordinarily difficult. I don't know how
they would account for that in any way, but I
guess we'll we'll see what the laws system decides on this.

Speaker 4 (18:00):
Yeah. On the other side is the other country has
to agree about untangling also, which would be kind of.

Speaker 2 (18:05):
The tricky part there. Yeah, yeah, because.

Speaker 4 (18:07):
All our commitments are going in different directions now based
on that for sure. And then Blake, when you were
talking about the one third, one third, one third, I
think when they talked about tearoffs up front, the consumer
thought they were going to get the whole whole cost
going directly to them. So if you took a five
percent as an example, and split it one third, one third,
one third, it might be a one or two percent
difference for the consumer just in that example. So it's

(18:32):
not as bad as maybe people were thinking. But we'll
have to watch the rest of the story.

Speaker 2 (18:37):
Right time will tell, so we'll see more with the
data that coming through.

Speaker 1 (18:40):
Absolutely, and we got one more quarter to go. Buckle up,
buckle up, well, Blake, do me, do me a huge favor.
I know that with regard to this, I mean, none
of these are really easy things. We need more of
a segment. But you know, in the first three quarters
of the year, do you think it's gone the way
that you felt it would when we started, because there
was so much inserted certainty when we started the new

(19:03):
year with a new administration, uh.

Speaker 2 (19:06):
Not not exactly how how he came into the year.

Speaker 3 (19:09):
So we did come into the year with the view
that point to point, this is going to.

Speaker 2 (19:12):
Be a stronger year. And you know, we were, you know,
quite quite vocal on that.

Speaker 3 (19:18):
You know, we had we had felt that the first
half was going to be the stronger half, with with
the backhand a little bit choppier.

Speaker 2 (19:26):
You know, usually that's how presidential cycles work their way through.

Speaker 3 (19:31):
So the front half, you know, again, point to point
end up being fine, but quarter by quarter there was
more volatility early on, and you know it, we we
felt that Trump.

Speaker 2 (19:45):
Would move fast, but boy did he move fast.

Speaker 3 (19:50):
Uh So I would say, you know, some of the
probably more volatility that we thought would happen back half
of the year was more front half weighted, you know,
with how how quick they moved.

Speaker 2 (20:00):
On some of the things.

Speaker 3 (20:02):
You know, it's usually you don't see that dramatic policy
moves that fast. So, you know, point to point, I
think in line, you know, but definitely it got pulled forward.

Speaker 2 (20:14):
Absolutely.

Speaker 1 (20:14):
Well, let's do this. We need to take a quick
break here for the news on Money Talks, but we'll
be back with much more in just a moment. You're
listening to Money Talks with Terry Sandbold and Blake Sandbold
and guys. A very interesting market update. It's like, we
got to this point, we're heading towards the fourth quarter,
and I think a lot of people are looking at
things going What happened you're telling us today.

Speaker 4 (20:37):
Yeah, a lot of things are going on. One thing
I wanted to mention too before we jump into the
rest of the topic today is when you have a
retirement seminar coming up on October seventh, just a little
bit away here. It'll be at the Sandworld Financi Group
office in Minnetaka. If you'd like to attend, give us
a call at nine to five two five four four
two eight three seven. Both myself and Blake will be

(21:00):
presenting at that seminar, and I think it'll be a
really good checklist for you to see if you're on
track or retirement. One of the big things we do
help people with is prepare for retirement and throughout retirement,
and the asset management is a big piece, looking at
all the things such as social security, what to do
with your four O one K, how to map out

(21:21):
the different pieces, what money to spend first, what's the
most cost effective way to spend down your assets in retirement?
These are all really important pieces, and sometimes there are
a one time decision on some of these things, such
as social security, so you want to be able to
analyze it first before you make the decision. Second, so
we'll go through a big checklist of all the different
things to be prepared. We'll hand out material that goes

(21:44):
along with that as well. But again, if you'd like
to reserve a spot, give us a call nine five
to two five four four two eight three seven October seventh,
from six to seven thirty.

Speaker 1 (21:56):
Perfect, And we just have to call nine five two
five four four two eight three seven to register, or
you can go online to do that at SAANDBLDFG dot com.

Speaker 2 (22:05):
Yep. Perfect.

Speaker 3 (22:07):
Well, you know, I think we should talk a little
bit about the Federal Reserve and interest rates, so, uh,
you know, that's kind of big, big news. Recently, the
Fed finally moved back to right cutting stands, you know,
so after you know, roughly a one year hiatus.

Speaker 2 (22:24):
Uh so that was good to see.

Speaker 3 (22:25):
You know, they cut by a quarter percent, so now
they're kind of the target range is four.

Speaker 2 (22:28):
To four and a quarter.

Speaker 3 (22:30):
You know, the market is still expecting one or two
more this year, so we'll see what happens on that.
It's market is definitely pricing in a cut again during
the month of October, Novembers and non voting months, so
December would be the next.

Speaker 2 (22:44):
One after that.

Speaker 3 (22:45):
You know, there's there's a lot of data that's going
to come between now and December, so you know, I
think it is a it is a tough call on that,
you know. The the big thing that we'll want to
start seeing on that is, I think if we start
to see pm I type numbers, so purchasing manufacturers indices,
if those start to turn lower and meaning that companies

(23:09):
are seeing less pricing pressure increases in their future, that
would be a good sign that we get a cut
again in December. So it's it's kind of interesting on
the for those indices, it's a it's a binary type question,
so it's are you seeing pricing pressures yes or no?
So it doesn't talk about magnitude on things, but that

(23:29):
would that would be a good sign because that usually
has a lead time into pp I, which has a
lead time into CPI and cp is a big one,
so that's what and then what the consumers are are
are spending or pain. So dot plot has additional cuts coming,
and you know we talked about it, uh with our
advisor team this last week. You think about the makeup

(23:51):
of the FED board, you know, by late spring next year,
early summer, it's gonna be very different. You know, You've
you've got the one gentleman who who's kind of temporary
right now, Mirren, who is definitely advocating for more substantially
more aggressive right cuts right from the get go. You know,
you've got Cook. We'll see exactly where things settle out there.

Speaker 1 (24:14):
Can I just say I'm sorry from in other tabloid news.
I mean they voted him in a squeaker vote the
night before the f o MC meeting, right, and then
you got Lisa Cook, who's technically fired but not extracted,
participating in the meeting.

Speaker 2 (24:25):
I mean exactly.

Speaker 1 (24:26):
You know, you don't usually hear Federal Reserve and drama
in the same sentence, but that's what happened.

Speaker 3 (24:31):
Well, and you know, our investment team was talking about
that this last week as well, and you know, it's
probably one of the largest divergences within the FED that
that we can think of, you know, on record. I
mean it's it's it's unique how it's split right now.
And then you know, obviously Powell, you know Will we'll

(24:51):
be stepping down in the spring as well. So it's
the makeup is going to be changing, and it's probably
going to be pro more sustained cuts by next summer.

Speaker 2 (25:02):
Yeah.

Speaker 4 (25:03):
I just picture a picture of a drone Paul at
the next meeting with an arm sling because somebody had
twisted his arm so bad.

Speaker 1 (25:09):
Yeah, right, Well, and he's probably going to need a
pillow strap to his rear in because the door is
probably going to hit him when he walks out next May.

Speaker 2 (25:17):
But I digress.

Speaker 1 (25:18):
Yeah, it's going to be pretty interesting. And but yeah,
most people, you know, you just don't notice the FED usually,
right right.

Speaker 2 (25:24):
You don't.

Speaker 3 (25:25):
Well, and you know it's something you know, Terry's talked
about it a lot. How you know twenty years ago
you didn't have all FED people talking, you know, every month,
and you know everyone's hopping on TV sharing their own opinion.

Speaker 2 (25:39):
That's too much, you know, it's too much.

Speaker 3 (25:41):
The market reacts too much on that trying to say
was you know, what are they trying to do? What
is actually being relayed from this? And it creates too
much noise and volatility around it and puts them too
much in the public.

Speaker 1 (25:53):
It's a really good point play.

Speaker 3 (25:54):
So who knows again one of those things where I
guess they didn't ask for our opinion, but there it is.

Speaker 2 (25:59):
Any well, they're getting so but moving on.

Speaker 3 (26:04):
You know, inflation, as we look at it really isn't
a spot where we think it's fine. You know, I
think it does some some did tick up definitely over
the last couple of months, but it looks to be
stabilizing right now. I mean, we had most recent CPI
was around two point nine percent year over year true inflation,
which we've.

Speaker 2 (26:24):
Talked about for quite a while.

Speaker 3 (26:26):
It's still only at about two point oh one percent,
so you know, that is kind of like a live
time API plug into about ten thousand different data feeds,
and so it's saying that that's close to the target.
So you know, I think it does give narrative that
that more cuts are okay, especially.

Speaker 2 (26:45):
When you know labor growth.

Speaker 3 (26:47):
Is not abundant to say the least right now, so
looking at their mandate, it makes sense.

Speaker 2 (26:55):
Again.

Speaker 3 (26:55):
You know, we talked a little bit about corporate earnings
and business trends. You know, I think as we get
focused in the next year, really being focused on that
CAPEX cycle, you know, where which companies are really truly
spending money for manufacturing automation infrastructure type built out in
the US, that's going to be a really big theme,

(27:17):
and some as traditional infrastructure. Some is going to be
new age technology infrastructure. Uh, you know, automation is is
going to be a big thing with AI. So you know,
those themes make a lot of sense to US. You
know banks that are taking chain, you know, adapting to
this changing environment right now. Some of those I think
are going to come through pretty well. You know, we'll

(27:38):
we'll talk a little bit more next segments. Biotechnology is
starting to be a really interesting space again, and you know,
you think about what is the narrative change with interest
rates being cut. You know, there's different parts of the
market that do well in a cutting environment versus a
hiking environment. So that's where this is really a time

(27:58):
to think proactively about what is changing. You know, variables
are changing right now, and getting ready and being proactive.

Speaker 2 (28:06):
For that is going to be really important.

Speaker 1 (28:08):
One other question, when you mentioned biotech, it made me
think of all the drugs that were manufactured in China
and how we thought it was such a problem during
in post pandemic. Have we seen and not just limited
to drugs, a lot of manufacturing return this year, Blake
or is that just getting started and we won't know
for a while.

Speaker 3 (28:28):
I think it's mixed, you know, there has been some
that's come back. Some have looked at Puerto Rico, some
have tried to look at Mexico.

Speaker 2 (28:35):
It's mixed, you know. Some some have gone to India,
and you.

Speaker 3 (28:38):
Know that that was kind of the The tricky part is,
you know, after COVID, a lot had looked to India
and said we're going to diversify or supply chain there. Well,
now there's you know, new tariffs on India that they
didn't think we're going to be there. So it's it's
been difficult for I think some of the companies to
think through where do they want to actually move their
supply chains. Because if it was supple I chain they

(29:00):
had half for twenty years, then they just rebuilt a
new one five years ago. It's tough to say we're
going to rebuild again now. So I think in some
spots there's certain buckets where it's been slower. There's certain
buckets that I have moved quicker on things. But I think,
you know, definitely for some of the medical type stuff,
I think they're going to be sustained exploring more in

(29:22):
the US, I would imagine we're going to.

Speaker 4 (29:24):
Have to be more independent of other countries for our medicine.
As the aging population gets bigger and bigger and bigger,
you know, and people are living longer, it's never going
to go away as an issue. So one of those things.
If we scary thought would be as if okay, we
could not get our medicine from pick a country wherever there,

(29:44):
you know, whichever country it could be. If that stopped tomorrow,
what would happen for thousands and thousands or millions of
people out there? It would really put their health in jeopardy.
So we really need to look internally and say, how
do we start building better connections internally so we're not
so dependent externally not a lot of that. So absolutely,

(30:05):
that's kind of the semiconductor issue that we're dealing with
now because Taiwan is so big in that arena, and
do we want to continue to be dependent and then
going down the road many years down the road, is
it going to be you know, it's going to be
a battle China and US for Taiwan. And if we're
not balanced on the semiconductor chip business here enough, who

(30:30):
can we depend on in the future if we do
not get that, if Taiwan doesn't go our way in
the future. So I mean, we have to build and
play defense as well as offense at the same time.

Speaker 1 (30:40):
Absolutely, we're doing a market update here on money talks,
and we've got more in just a moment. It's Money
Talks with Terry Sandbold and Blake sand Bold and Terry,
we're doing a market update today and you've got a
really great live event coming up we do.

Speaker 4 (30:57):
It's just around the corner too. It's October seventh at
six o'clock at the Sandbold Financial Group office in Minnetaka.
It's one zero nine zero zero Wisetta Boulevard Sweet One
in Minnetaka.

Speaker 2 (31:10):
Right.

Speaker 4 (31:11):
I guess you say east of Ridgedale Shopping Center if
you know that area about roughly a mile but we're
in two twin towers there, so to speak, but give
us a call if you'd like to attend. It's the
Retirement Playbook, a guide to confident Planning, and myself and
Blake will be presenting there. So you get two of

(31:32):
us for the price of none. You don't have to
pay for it. But basically what we're going to do
there is go through some of the key things you
need to look at in regards to retirement planning. So
we'll cover a lot of topics. We'll do it in
ninety minutes. We'll provide advertisers and refreshments as well. But
we'd like to see you there because this is the

(31:53):
time of the year when a lot of people get
serious about am I going to be really ready for retirement?
When will I be ready for your retirement? Should I
retire this year? Can I retire this year? Some will
be coming with that question still ye, And we'll go
through all the different things you need to make big
decisions on UH And as I mentioned earlier, a lot
of these are one time decisions and if you make

(32:15):
the wrong one, it can be very costly. So having
the right information first, making the right decision. Second part
of it is having the right information, like I mentioned,
So give us a call if you'd like to attend
nine five two five four four two eight three seven.
Again that's nine five two five four four two eight

(32:35):
three seven, or you can request online at sandvildefg dot
com if you'd like to attend. Perfect.

Speaker 3 (32:45):
So, I think what we should talk about now is
kind of where where we see things going forward from here?
And you know what, what are the the macro themes
to really focus on again. So you know, again, if
you look at us domestically right now, we do actually
still see pretty decent growth in the US. I mean,
we still see growth pacing two to three percent for

(33:08):
the US economy over the next year or so. And
you know, I think you think about some of the
capex expenditures that we've been talking about. Now it's just
now starting to a real point, you know, so far
it's all been talk and kind of planning, but it'll
be you know, later this year unto next year when
actually boots to ground, you know, starts happening on things,

(33:28):
so to speak. So I think that's a key thing
to look at. Another large factor that we look at
is kind of wage growth relative to inflation, and you
actually look at it, wage growth is pacing at least
a full percent above inflation right now, and that's a
good thing and actually has for about the last eighteen
months on average. So as much as the inflation shock

(33:51):
hurt in twenty twenty two, it's kind of meaning that
the pain is getting a little bit less worse right now.
You know, you're on a real basis catching up a
little bit. So that's an important thing to watch for
retail spending. So I think those are are important themes
to keep in your back back of the mind as
we think to close out this year in the next year.
So it's an economy that's still doing okay. It's not great,

(34:14):
but it's far from bad either, So it's still doing okay. Uh,
And we're seeing interest rate cuts, so that that is
kind of a liquidity wave coming into different parts in
the market. So being focused on areas that are kind
of most levered to those themes is kind of an
interesting way to look at it right now. And you know,
one that that we're very focused on as small cap companies,

(34:37):
So smaller US companies you know, a lot of times
can be six billion dollar market cap or less, which
is kind of amazing. That's that's considered small right now.
It's changed a lot over the last four decades of
or so of Terry's career.

Speaker 4 (34:50):
Well, let's say our Sandal Financial Group is probably in
that category still.

Speaker 3 (34:54):
Yeah, right, But you know, you look at this smaller
companies on average, they've struggled since twenty twenty two. You know,
they've started to come back to life over the last
couple of weeks as the FED is kind of back
in that rate cutting mindset. But those you know, you
typically think a lot of them will have variable type

(35:15):
rate loans, so those have been higher the last couple
of years.

Speaker 2 (35:17):
If those come down. That helps their balance sheets look
a lot better.

Speaker 3 (35:21):
But they're also at one of the cheapest relative valuations
between small caps and large caps over the last three decades.
And you know, that always is kind of interesting to
us when you say cheapest in that timeframe. You don't
know exactly when that's going to shift, but you know,
it's it's one thing that says, you know, we're kind
of in the range where you know, fundamentally that's worth

(35:42):
looking at and saying what is a catalyst? Interest rates
and domestic manufacturing could be a catalyst. So that's why
that's that's an interesting spot. You know, other thing as again,
as we talked about, you know, how can we focus
on productivity growth and this has kind of been something

(36:02):
that we've talked about for for quite a while.

Speaker 2 (36:04):
But you know, you look at.

Speaker 3 (36:08):
Population growth in the US, it's not robust. I mean,
it's it's been taking down. You know, birth rates have
been lower and later on in life, less less children,
migration stuff you know, has has slowed recently as it's
trying to figure out, you know what what is this
true long term sustainable policy look like there? So if

(36:30):
we're saying we're doing that, we want more manufacturing coming
back here. We need a bigger pool to work on,
so we need automation, we need productivity growth, and you
know that's productivity growth is a good way to say
we can you know, boost living standards and boost overall
GDP growth long term. So that's kind of the the

(36:50):
exciting upshot of AI saying, you know, companies that are
implementing that, economies that are implementing that should deserve a
higher premium because they could grow a higher growth.

Speaker 2 (37:00):
Rate going forward. So I think that that's going to
be a really interesting thing.

Speaker 3 (37:06):
And you know, we had a conversation Kelly a couple
of weeks ago with a commodity fund manager, right, and
that that's the unique thing with AI is not just
getting focused solely on you know, the hardware companies that
are assisting with that. It's thinking abstractly, what else is
going to go on, and it's you know, real estate

(37:27):
is going to change, commodities are going to change. Everything
is going to change from that in different ways. So
it's trying to find who's actually taken advantage of it
or not. But you know, you look at copper as
an example, there's massive demand that's going to come from
building some of this stuff out. It's it's going to
look look very different going forward. So there's good areas

(37:48):
to be excited about, but it does need to be
proactive on things right now.

Speaker 4 (37:52):
Amazing, they'll need more copper than just recycling the pennies,
that's right, Yeah, yeah.

Speaker 1 (37:58):
Yeah, yeah, Well we just have a couple of minutes left, gentlemen.
I know it's hard to get to everything in our
short time each week, but I mean, what are your
final thoughts, Blake that people need to be looking at
as we go careening towards the end of the year.

Speaker 3 (38:12):
Yeah, so I think you know, if it's been a
while since you've looked at what you're holding your portfolio,
this is the time to look at it again and
really do a deep dive. Parts of the parts of
the market are starting to work that haven't been interesting
in quite some time.

Speaker 2 (38:29):
You know.

Speaker 3 (38:29):
As an example, we talked earlier about some international stuff.
There's certain buckets internationally that are actually starting to look interesting,
you know, after underperforming for pretty much a decade again,
small cap stuff is starting to look interesting. There's going
to be changes in the fixed income market right now
to be looking at and you know, as the FED
is looking at lowering interest rates, there are a lot

(38:51):
of people, a lot of funds that solely went into
money market type stuff and those are going to keep
getting a lower and lower payout, which you know, it's
still not necessarily bad spot to be, you know, for
for something safer. But you know, are there other parts
of the fixed income market that are looking interesting right now?

Speaker 2 (39:09):
Yeah? In our mind, there are, you.

Speaker 3 (39:11):
Know, there's there's the high yield credit market is still
looking interesting. Uh, you know, some of the variable rate
loans are actually still looking interesting as as default.

Speaker 2 (39:22):
Rates are low.

Speaker 3 (39:24):
So I think there's a lot that's working in the
markets and a lot of areas that we do think
look interesting that may not have been on everyone's radar.
So so that's where I think it's this is the
exact right time to do deep dive on that, look
at what you own, why you own it, and maybe

(39:44):
have a second opinion on where things are at right now.

Speaker 2 (39:47):
And how do we do that, Terry.

Speaker 4 (39:48):
One way is give us a call at nine five
two five four four two eight three seven. Again that's
Sandwold Financial Group at ninety five two five four four
two eight three seven or question, online conversation at sandvildefg
dot com